Just 2 sleeps to go :) It is fast approaching Xanadu time for...

Just 2 sleeps to go
It is fast approaching Xanadu time for Whitebark Energy (ASX: WBE) and its partners as they prepare to spud one of only a handful of exploration wells in the Perth Basin this year.
And unlike the 1980 Xanadu film flop that starred Olivia Newton-John, Whitebark and partners will be hoping for far more rewarding, and memorable, times when the Xanadu-1 well spuds on Tuesday.
For all its prospectivity and a decades-long history of producing oil and gas, activity in the Perth Basin lags that of eastern Australia’s most prolific onshore hydrocarbon basins.
Not surprisingly, the most active players in the Perth Basin are from the junior end of the ASX oil and gas spectrum, with Whitebark’s partners in the Xanadu-1 well including operator Norwest Energy (ASX: NWE) and Triangle Energy (Global) (ASX: TEG).
Originally slated for spudding in the second half of this month, Whitebark was able to announce this week that the Enerdrill Rig-3 had been released earlier than expected from its Waitsia drilling program and had been moved onto the Xanadu location, near Dongara about 300km north of Perth.
Drilling of Xanadu-1 should take about 23 days.
The well will test the Xanadu prospect, which has an unrisked recoverable resource of 160 million barrels of conventional oil. Although drilling will start from an onshore location, the well will use a deviated profile to access a prospect that lies in shallow waters 920m off the coast.
Xanadu-1 is one of only a few exploration wells to be drilled in the Perth Basin this year.
Notwithstanding the excitement generated by AWE and Origin Energy’s big Waitsia gas discovery in 2014, and a successful follow-up drilling program that included the just-completed Waitsia-3 and Waitsia-4 wells, other Perth Basin players are struggling to match it with the drill bit.
Whitebark and partners hope to change that with Xanadu-1, which is being billed as one of the biggest untested oil targets in the basin and one that could potentially match past discoveries Cliff Head, Hovea, Eremia and Jingemia.
In oil and gas, the chances of exploration success are typically between 10% and 15% - which explains the high risk-high reward nature for investors.
In Whitebark’s case, its 20% share of participating in Xanadu-1 is likely to cost $1.6 million, comfortably covered within the company’s $4.9 million cash balance as at June 30.
There is, therefore, little downside for Whitebark which sees its participation in Xanadu as the high-impact exploration upside to complement the Perth company’s backbone – a low-cost production and cashflow growth push in onshore Canada.